Bid to limit tax cuts to middle class and poor fails in Senate

WASHINGTON — The Senate on Saturday blocked — and most likely doomed — efforts to end Bush-era tax cuts for the very wealthy while preserving them for people earning up to $1 million.

The votes effectively clear the way for the White House and Congress to iron out a compromise on how to continue the expiring breaks. Bipartisan talks began earlier this week, and it's widely expected negotiators will agree to a temporary extension of the cuts for every income group, which expire Dec. 31.

Saturday was largely a day for making political points and reiterating long-held views. The Senate took two votes to cut off debate on the middle class/poor cuts, but both failed to get the support of the 60 of 100 senators needed. Most of the opposition came from Republicans.

The House of Representatives voted Thursday to approve the cuts for the middle class and the poor, with most Democrats voting yes and most Republicans voting no.

Democrats expressed their disdain for an across-the-board extension, charging that Republicans were giving the rich help they didn't need.

Most Democrats, and President Barack Obama, favor only an extension of the cuts for individuals earning less than $200,000 and couples making less than $250,000. Republicans, and some moderate Democrats, want all the cuts extended, saying that raising taxes during an economic slump would be disastrous.

If the cuts for the wealthy aren't extended, the two top rates, now 33 percent and 35 percent, would go back to pre-Bush era levels of 36 percent and 39.6 percent.

"It's a question of who you're going to help," said Sen. Mark Begich, D-Alaska. "We're going to help the small business owners. We're going to help the middle class."

Obama said Saturday that the middle-class tax cuts were being held hostage by the Republicans.

"I am very disappointed that the Senate is not going to pass legislation that has already passed in the House of Representatives that would make the middle-class tax cuts permanent," he said. "Those provisions should have passed."

Republicans countered that the Saturday votes were little more than a political show, and now that they're done, lawmakers can get on with serious negotiations.

"It became apparent the second time we met," said Sen. Jon Kyl, R-Ariz., one of the negotiators, "that actually there wasn't going to be any bipartisan negotiations to reach a decision until there had been a political catharsis on the Democratic side."

Saturday, Democrats got to make their points with votes on two measures.

One would have extended the tax cuts, originally enacted in 2001 and 2003, only to the middle class and the poor, and would have continued jobless benefits for the long-term unemployed. Funding for those benefits ran out Wednesday, and about 2 million people are expected to lose their benefits unless Congress acts.

The vote for cutting off extended debate was 53-36, effectively dooming the measure, since 60 votes were needed. Republicans voting to continue debate were joined by independent Joe Lieberman of Connecticut and four Democrats: Russ Feingold of Wisconsin, Joe Manchin of West Virginia, Jim Webb of Virginia and Ben Nelson of Nebraska.

The second measure would have extended the cuts for those earning less than $1 million, a plan Democrats viewed as a potential compromise with Republicans favoring cuts for upper-income earners.

The vote to end that debate was 53-37, also effectively killing the plan. Lieberman and four Democrats — Feingold and Jay Rockefeller of West Virginia, Richard Durbin of Illinois and Tom Harkin of Iowa voted not to cut off debate.

But these votes, along with Thursday's House approval of the $200,000/$250,000 cut, served several political purposes.

It put Democrats on the record as opposing tax cuts for the rich. Sen. Charles Schumer, D-N.Y., who won re-election last month, noted that people often asked if his party understands the election's mandate. Republicans gained 63 House seats and six Senate seats.

"They did say repeal health care. And they did say shrink the size of government," he said. "But not a single one of them, from the tea party or anywhere else, said, 'Give tax breaks to the millionaires."'

The vote also gave Democrats a forum for painting the GOP as insensitive and divisive.

"The minority in the Senate believes — against all evidence to the contrary — that millionaires, billionaires and CEOs who ship jobs overseas deserve this giveaway," said Senate Majority Leader Harry Reid of Nevada.

The vote also gave Republicans some talking points. Senate Republican leader Mitch McConnell called the Saturday vote "a total waste" of time and dubbed Democrats' effort "a vote to slam job creators with a massive tax increase."

And, said Sen. Orrin Hatch, R-Utah, "It's too late for partisan stunts. The American people need action."